Shares of Otis Worldwide Corp. (OTIS) have climbed 28.6% over the past 12 months. The company provides as well as services passenger and freight elevators and escalators.
Recently, Otis delivered a mixed set of fourth-quarter numbers with its bottom-line coming in ahead of estimates. Buoyed by organic growth revenue increased 2.2% year-over-year to $3.57 billion, but lagged estimates of $3.58 billion.
A combination of expanded margins and lower tax rates helped the company increase earnings per share 9.1% year-over-year to $0.72. Analysts had expected earnings per share of $0.68 for this period.
Further, the company has declared a quarterly dividend of $0.24 per share. The dividend is payable on March 10 to investors on record as of February 18.
With these developments in mind, let us take a look at the changes in Otis’ key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Otis’ top risk category is Finance & Corporate, contributing 11 of the total 27 risks identified for the stock, compared to a sector average of 12 risks under the same category.
In its recent report, the company has added one key risk factor under the Finance & Corporate risk category.
Otis highlighted the risks related to its tender offer for Zardoya Otis, which is an elevator equipment and service business. Otis already is a majority shareholder and has operational control over Zardoya Otis. Otis has reached an agreement with Euro-Syns to tender its stake in Zardoya Otis and plans to delist the company from the Madrid, Barcelona, Bilbao, and Valencia stock exchanges.
The risk remains that if this tender offer is not completed at the expected price or the anticipated benefits of the transaction do not materialize, then the share price of Otis may take a hit.
Hedge Fund Activity
According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in Otis by 2.8 million shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 14 hedge funds.
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